Energy: The Government Looks to Raise Fuel Economy Standards

Environmentalists can take President Obama to task for more than a few disappointments over the first two years of his Administration—and some of them have—but one area where the White House has fulfilled its green pledges is in auto fuel efficiency. In May 2009 Obama brokered a deal with the auto industry that saw Corporate Average Fuel Economy (CAFE) standards rise for the first time in years, requiring automakers to meet a minimum level of 35.5 miles per gallon (mpg) by 2016. While carbon cap-and-trade and other climate policies often needed the cooperation of a cantankerous Congress, a tougher gas mileage standard was something the White House could do on its own—and the weakness of the U.S. auto industry sapped the opposition of any strength.

Now the White House is prepared to go further. The Environmental Protection Agency and the Department of Transportation announced today that they will begin developing tougher mileage standards for cars and trucks for 2017 to 2025. Though the immediate details haven’t been spelled out (you can wade through all 245 pages of the government’s technical arguments with a PDF here), environmental groups close to the White House say that the rules may require carmakers to double the fuel economy of their vehicles to 62 mpg by 2025. (Roland Hwang, the transportation program director for the Natural Resources Defense Council, breaks down the numbers here.)

62 mpg would be an enormous jump in just 15 years—though that figure would represent a fleetwide average, so car companies would be allowed to have less efficient vehicles provided some of their others models were above average. (The Alliance of Automobile Manufacturers, the main industry group, isn’t saying much for now.) The tougher standards would almost certainly require wider adoption of electric vehicles, a change that does finally seem on the verge of happening. The rules would also bring the U.S. more in line with developed nations in Europe, which have tough fuel standards, and even rising competitors like China. And if nothing else, the new policy should rightfully win Obama points with greens who’ve been less than impressed by his first two years.

Still, there’s a long way to go from a policy proposal to firm new standards—and if the Republicans take control of Congress, the auto industry may feel emboldened to fight back. It’s also worth remembering that, as I wrote recently, there can be a rebound effect for efficiency gains. NRDC’s Hwang writes that a 62 mpg standard would save 73% more carbon than a lighter, 47 mpg standard—but at least some of the cost savings drivers will earn with more efficient cars will be spent on activities and objects that have carbon and energy embedded in them. If Obama were really interested in motivating Americans to drive less and conserve he would seek to raise the price of gas—it sure worked during the days of $4 a gallon gas a couple of years ago. But there’s political courage—and then there’s political suicide. Raising gas prices through taxes—especially in the aftermath of a recession—would still be the latter.